The Economic Impacts of Plug-in Electric Vehicles in Canada and Regions
To capture direct, indirect and induced dollar impacts on the national and provincial economies of varying EV adoption scenarios.
A large shift to EV mobility, particularly a rapid one, would have significant repercussions for the Canadian economy. There are three main positive aspects to the EV economic impacts. First, there are the new capital impacts that arise from new investment in machinery, warehousing, and infrastructure to support the EV system. Second, there will be new operational expenditure impacts that arise from operating and maintaining the new vehicles. Third, there will be energy and repair expenditure savings on account of lower operational costs and the environmental and renewable energy-friendly nature of EVs. These savings support increases in consumption of other goods and services as they raise the disposable incomes of households.
However, in the short run at least, many of the impacts might well not be positive. A large share of Canada’s economic system is premised on the automobile and its current dependence on the internal combustion engine. In Canada, there are currently nine auto assembly plants, 160,000 workers in auto production and parts manufacturing and 336,000 workers in distribution and aftermarket sales and service. Various stakeholders will have concerns about a shift. Auto Dealerships could have reservations about the lower life-cycle maintenance costs of EVs. Vertically integrated petroleum companies could face lost revenues as the transportation sector is a critical end-market for their products. People and firms who repair internal combustion engines and perform other maintenance and owners of gas stations would have valid concerns about the growth prospects of their businesses.
The economic impact analysis will be dependent on the outputs of other modules.
Some useful preparatory work has already been undertaken. In 2014, the research team worked with the Windfall Ecology Centre to contribute to their related study “The Economic Impact of Electric Vehicle Adoption in Ontario.” In 2015 team members Kubursi and Kanaroglou have worked on a report titled: “The Automotive Sector in Canada: Prospects and Challenges” that it is intended to set a benchmark for the importance of the auto sector as a whole to the Canadian economy. Results are based on a macroeconomic model which ultimately will be run for several realistic scenarios illustrating the adoption of electric vehicles. The scenarios are going to be developed after extensive econometric analysis of survey data collected for Canada and after required inputs from other modules become available.
Quinn Hachey is a Master’s candidate who is involved in research that will support the objectives of this module. His research is on understanding the nature of automotive supply chains and the automotive industry and the extent to which traditional automotive manufacturers will have the wherewithal to be adaptable in the face of disruptive innovations such as the rise of the electric vehicle. Results from this research will provide valuable insight that will support the economic impact analysis.